COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         5542-01

Bill No.:          HB 2555

Subject:           Business and Commerce; Economic Development Department;

Type:              Original

Date:               April 21, 2008

Bill Summary:            This proposal creates the Entrepreneurial Development Council within the Department of Economic Development.

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 5 pages.

☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☐ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

FISCAL ANALYSIS

ASSUMPTION

Officials from the Office of the State Treasurer assume the proposal would not fiscally impact their agency.

Officials from the Office of the Secretary of State (SOS) assume many bills considered by the General Assembly include provisions allowing or requiring agencies to submit rules and regulations to implement the act. The SOS is provided with core funding to handle a certain amount of normal activity resulting from each year’s legislative session. The fiscal impact for this fiscal note to the SOS for Administrative Rules is less than $2,500. The SOS recognizes that this is a small amount and does not expect that additional funding would be required to meet these costs. However, we also recognize that many such bills may be passed by the General Assembly in a given year and that collectively the costs may be in excess of what our office can sustain with our core budget. Therefore, we reserve the right to request funding for the cost of supporting administrative rules requirements should the need arise based on a review of the finally approved bills signed by the governor.

Officials from the Department of Economic Development (DED) assume the need for an unknown amount of FTE (a minimum of one) to provide support to the 7 member council, issue loans and grants, and collect the fee authorized. Cost of one FTE with fringes and expenses would be estimated at $80,000. DED also assumes collection of the fee from participants. DED assumes the Council will hold an unknown amount of meetings and incur additional printing/binding costs. Each meeting would be projected to cost $1,958 with a minimum of 6 meetings = $11,748. Additional printing/binding would be estimated to be $8,500. Minimum cost would be a little over $100,000. DED assumes any fees taken in or funds appropriated would be used to assist with grants, loans, or other assistance.

Oversight assumes the costs incurred by the Department of Economic Development to support this new council would be appropriated from the General Revenue fund. Based upon DED’s response, Oversight will assume a cost to the General Revenue Fund of an unknown amount - possibly exceeding $100,000.

This council ‘may’ impose a registration fee for entrepreneurs who desire to avail themselves of benefits. Therefore, Oversight will assume a range of $0 to Unknown (may or may not) amount of registration fees to be collected into the new fund. Oversight will also show a $0 to Unknown expense out of the fund for potential grants and financial assistance for entrepreneurs. Oversight will assume all proceeds (if any) into the fund will be spent in the same year.

FISCAL IMPACT - Small Business

No direct fiscal impact to small businesses would be expected as a result of this proposal.

FISCAL DESCRIPTION

This bill establishes the Entrepreneurial Development Council within the Department of Economic Development consisting of seven members from Missouri businesses and licensed attorneys specializing in intellectual property law. All members will be appointed by the Governor with the advice and consent of the Senate. The department will establish the terms of membership, which will be permanent and apply to all subsequent members.

The council will provide benefits to entrepreneurs who register with it. The council may impose a registration fee, as provided by department rule, for Missouri entrepreneurs who wish to avail themselves of the council's benefits.

The Entrepreneurial Development and Intellectual Property Right Protection Fund is created to accept state and federal appropriations, grants, bequests, gifts, fees, and awards to be used by the council.

The council will evaluate allegations of intellectual property rights infringement and may, based on need, award grants or financial assistance to subsidize legal expenses incurred in instituting legal action necessary to remedy the alleged infringement. The council may allocate money from the fund, as provided by department rule, for low-interest loans and grants to registered entrepreneurs to provide financial aid for product development, manufacturing, and advertising of new products.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Department of Economic Development

Office of the Secretary of State

Office of the State Treasurer

                                                                                                Mickey Wilson, CPA

                                                                                                Director

                                                                                                April 21, 2008